Monday, September 01, 2008 Napocor now seeks P.50 rate hike
FROM the original P0.3685 per kilowatthour (kWh) rate adjustment it filed last July with the Energy Regulatory Commission (ERC), state-run National Power Corporation (Napocor) is asking to increase its rates to P0.50 per kWh.
ERC executive director Francis Saturnino Juan said during the recent public hearing that Napocor was asking for an adjustment of P0.45 to P0.50 per kWh higher than the original P0.37 per kWh rate increase in its time-of-use (TOU) rates since the power firm wanted to include the cost of contracts with the independent power producers (IPPs), as well as the impact of the sale of their small hydro plants.
Juan said if these contracts with IPPs and the cost impact involving the sale of some generation assets, primarily the smaller hydro plants, would be included, Napocor’s rate would be pushed up by P0.50 per kWh.
“The published rate increase application and the basis of our public hearings is just for the P0.37 per kWh rate increase, so we told Napocor that we cannot decide on the higher rate increase of P0.45 to P0.50 per kWh they have presented during the hearings,” he explained.
Napocor, together with Power Sector Assets and Liabilities Management Corporation (Psalm), has been directed by the ERC to file an amended petition or a new petition on rate increase.
The ERC has likewise given the parties 15 days to submit their petition.
Under ERC Case 2008-030-RC, Napocor is asking the regulator for the Luzon grid, be adjusted to P4.2651 per kWh from P3.8966 per kWh, which was the prevailing rate prior to the P0.71 per kWh reduction in its selling rate starting June billing cycle.
Juan said the ERC would not be able to decide on the P0.37 per kWh average adjustment being sought if the computation inputting the IPP and power plant costs would push up the rates by up to P0.50 per kWh.
Should Napocor file a new or amended petition, Juan said it will go through the same process of publication and public hearings.
On the other hand, observers are convinced that the higher rates being sought by Napocor may delay decision process and may not be decided upon by the ERC before the year ends.
In its petition, Napocor is asking the ERC to adjust by P0.3685 per kilowatt hour (kWh) its basic generation charge to P4.2651 per kWh from P3.8966 per kWh. Should the ERC grant Napocor’s petition, residential customers of the Manila Electric Company (Meralco) will pay additional P0.148 per kWh or a total of P30 for 200 kWh users.
At the same time, Napocor stated in its application that it decided to include the allowable cost recovery of its remaining IPP contracts to be part of its prevailing basic rate. These shall cover the Malaya thermal power plant, Caliraya-Botocan-Kalayaan hydropower plant, Naga thermal plant, and Mindanao coal-fired thermal plant.
Moreover, Napocor said it did not indicate the sale of its smaller hydro plants in the application, but they still want their costs be computed in its basic rate.
To justify their petition, Napocor said “the impact of the sale of these small hydro plants is very minimal to affect the average generation rate.”
The small hydropower plants sold include the Talomo, Agusan, Barit, Cawayan and Loboc hydroelectric plants.
The ERC started the petition for rate increase of Napocor last July 30 and hoped to complete the hearing in a month’s time.
Aside from the P0.37 rate increase, Napocor has also five to six more rate adjustment filed with the ERC including the generation rate adjustment mechanism (Gram) and incremental currency exchange rate adjustment (Icera). (MSN/Sunnex)
